Alliance Group value-added strategy ‘on track’
In November 2019, the group announced a profit of NZ$20.7m before distributions and tax, on revenue of NZ$1.7bn. The company also announced NZ$9m profit distribution to supplying shareholders.
“The profit result was the best trading result since 2010,” said Murray Taggart, chairman of Alliance Group. “Our goal is to build a more robust business with consistently higher profit margins to ensure we can maximise in-market value capture and take advantage of new manufacturing technologies to deliver even better returns to our farmer shareholders.”
The business has been shifting towards a value-added focus over the past year with major investments made at several of its processing plants to manage this change.
Alliance Group chief executive David Surveyor said the company is on track to capture greater market value. “A visible example of this change was our purchase of 50% of the Meateor pet food business. This investment enables us to capture value from the next stage of processing in the pet food industry and supply directly into the large global pet food players.”
The business reported that its food service division in the UK also achieved significant growth. “We are expanding our food service programme in North America, Asia and New Zealand,” said Surveyor. “The Te Mana Lamb and Silere Alpine Origin Merino lamb programmes have confirmed our ability to differentiate our product and capture a premium from the market. We are now looking to expand the premium lamb brand opportunity across our supply base.”
Surveyor added the company has improved its performance in beef, but there was still more to do in this area. “All three beef plants achieved record processing and our beef market share was up. Our beef performance has historically been a frustration for farmers and the company, but a determined focus on improvement at all levels of the supply chain has seen the profitability of our beef operation improve significantly at the same time as delivering a more competitive offer to farmers. “The launch of our Handpicked premium offers is further evidence of our confidence in our beef business.”